Ooma (OOMA) Stock Forecast & Price Target

Ooma Inc. reported a subscription and services revenue of $60.6 million, reflecting a year-over-year increase of 4%, which outperformed market expectations. The company provided guidance projecting revenues between $267 million and $270 million for the upcoming year, indicating an anticipated growth of approximately 5%. Notably, the growth is bolstered by the popularity of its AirDial POTS replacement product and improved operating margins due to reduced research and development expenses, suggesting a solid foundation for future expansion and profitability.

Ooma Inc. is projecting a decline in Adjusted EBITDA for fiscal 2026, with estimates ranging from $27.5M to $29.0M, which falls significantly below management's long-term margin expectations. Despite a year-over-year revenue increase, the company's annualized exit recurring revenue remains flat while its subscription retention rate has slightly decreased, indicating potential challenges in maintaining customer loyalty. Furthermore, Ooma is facing various operational risks, such as reliance on reseller partnerships and vulnerability to competitive pressures, which could negatively impact its overall financial performance and market position.